Journal of Business Venturing 21 (2006) 401–404

Editorial

Entrepreneurship and strategic alliances

Keywords: Alliances; Entrepreneurship

1. Introduction

Alliances date to the beginning of the world as we know it, with early collaborations

between Greek city states formed to defeat Persia (Smith et al., 1995). However, present-

day academic interest in business alliances is largely rooted in the late 1970s and early

1980s when joint ventures were studied as vehicles for U.S. multinationals to expand

internationally. Alliances were often equity joint ventures geared to respond to foreign

governments’ restrictions on foreign direct investment. Typically the foreign investor

sought local market access, technology transfer was unilateral, and collaborations tended

to take place in commodity and other, less advanced industries. Today, however, alliances

often involve complex deal structures, bilateral knowledge flows, and the blending of

cooperation and competition amongst rivals (Reuer, 2004).

During the last three decades, there has been an impressive rise in alliance research,

with studies examining topics as diverse as investment patterns, organizational governance

choices, network structures, trust formation, and so forth. There have been many special

issues devoted to alliances in the leading journals, and alliances often represent a major

share of presentations at management and strategy conferences. Alliance research has

arguably become a cottage industry of sorts, and many alliance phenomena have been

studied extensively despite the relatively short history of this stream of research.

Given these developments in practice and theory, we believe that entrepreneurship is one

of the most important and interesting frontiers for research on alliance phenomena. Most of

the prior research on strategic alliances examines these relationships from the perspective of

established, large firms. However, alliances can also be critically important to entrepreneu-

rial firms (Alvarez and Barney, 2001; Ireland et al., 2006). Today’s competitive environment

finds entrepreneurial firms increasingly using strategic alliances to accomplish many

objectives, ranging from obtaining cost efficiencies to exploring new options in distant

markets to obtaining resources such as financial capital or legitimacy from other firms.

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It is striking, therefore, that comparatively little is known about alliances in

entrepreneurial settings. To date, with a few exceptions, the contributions of entrepreneur-

ship perspectives to the alliance literature, and vice-versa, have been relatively limited.

Important questions arise concerning what entrepreneurial alliances are like, whether and

how they are different from btraditionalQ alliances, how alliances operate in entrepreneurial

contexts of uncertainty (Alvarez and Barney, 2005), how alliances might help large or

small firms become more entrepreneurial in their strategies (e.g., Ireland et al., 2006), and

how the opportunities and challenges associated with various alliances and networks

change as firms evolve. These are but a few of the many research opportunities at the

intersection of the entrepreneurship and alliance literatures. The papers presented in this

volume begin to make progress on joining these two streams of research as a means of

providing important contributions to the entrepreneurship and alliance literatures.

2. Overview of the volume

One of the attractions for the small entrepreneurial venture to form an alliance with a

larger, more established partner is to gain access to that firm’s financial capital. While

entrepreneurial start-ups such as biotechnology firms may have resources with value-

creating potential, financial capital is commonly a resource that is in insufficient supply. In

their article in this special issue, Coombs, Mudambi and Deeds examine the extent to

which firm- and location-specific characteristics are associated with the flow of financial

capital from foreign and domestic corporate partners to entrepreneurial ventures. They find

that the number of recent patents held by a biotechnology firm has the strongest influence

on the amount of domestic alliance capital received by the entrepreneurial venture. In

contrast, in terms of foreign alliance capital, the technological munificence of the

biotechnology firm’s location is a significant determinant of financial capital received by

the entrepreneurial venture. Coombs et al. interpret their findings as indications that

foreign firms use their financial capital to form alliances with entrepreneurial ventures with

locations in which desirable knowledge spillovers can be expected. Domestic firms are

relatively more interested in using their financial capital to form alliances with

entrepreneurial ventures that have high-quality research capabilities, as demonstrated by

their recent patent success. Thus, domestic and foreign partners appear to have different

motivations when selecting partners for their entrepreneurial alliances.

Rothaermel and Deeds provide another examination of alliances in the biotechnology

sector, yet their focus is on the development of firms’ alliance management capabilities.

Their work shifts attention from the individual deal to the firm, or portfolio, level of

analysis. In contrast to prior studies that have investigated experiential learning as the

mechanism for alliance capability development, they suggest that both alliance-specific

and firm-level factors shape the development and evolution of alliance management

capabilities. For example, they argue that different types of alliances pose unique demands

on capability development processes because different types of alliances vary in tacitness,

ambiguity, and complexity. Their specific focus is on the impact of various alliances on

new product development, and they present evidence that both the type of alliance and the

age of a firm moderate the relationship between firms’ alliance experience and the new

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products they develop. This paper therefore advances upon prior research by investigating

the contingencies affecting the development of alliance management capabilities.

While entrepreneurial firms have turned to alliances to manage challenges associated

with technology, they have also used alliances as an organizational form to expand into

international markets (Leiblein and Reuer, 2004). In their work included in the special

issue, Lu and Beamish focus on international joint ventures (IJVs) established by Japanese

SMEs, and these researchers examine the differential effects of experience-based resources

and firm-size based resources on two dimensions of IJV performance—profitability and

longevity. Their findings suggest that IJV performance is indeed a multi-dimensional

construct. Lu and Beamish’s results present scholars with an intriguing set of questions to

examine regarding the effects of different partnering strategies on different organizational

objectives. Given the uncertainty associated with entrepreneurial alliances, these findings

also provide a set of guidelines for firms to examine when seeking to form one or more

entrepreneurial alliances to achieve their organizational objectives.

The paper by Dickson, Weaver, and Hoy similarly examines international alliances

conducted by SMEs. Their specific focus is on the opportunistic behavior that often

accompanies such collaborative agreements, yet can vary based on the governance

structures firms employ as well as the national contexts in which alliances are situated.

Their work is unique and valuable because it directly addresses opportunism perceptions

in alliances rather than assuming opportunism will be likely under exchange hazards that

commonly surround alliances. Using an impressive multinational survey across eight

countries, their work also sheds light on the importance of relational governance

mechanisms as well as on the cross-national differences that exist in the impact of different

alliance control structures.

While transaction cost theory and other strands of economics have made a substantial

contribution to research on alliances, other streams of research have also attended to

organizations’ social structures and social ties as additional important influences on

collaborative agreements. Work included in this special issue highlights the importance of

these structures and ties for entrepreneurial alliances as well. The paper by Lechner,

Dowling, and Welpe informs the social network study of alliances by suggesting that not

only do the social networks of the firm provide alliance opportunities, but as the firm

develops, it in turn influences and changes its network. The Lechner et al. paper considers

five different types of networks; strong tie networks, reputational networks, marketing

information networks, co-opetition networks, and co-operative technology networks. They

suggest that the social networks of small and new firms have a mix of the sub-networks

they have identified, which in turn affects the firm differently at different points in its

development. One implication is that if firm and network development do not evolve in a

consistent manner, the firm’s survival may be at stake.

The paper by Walter, Auer, and Ritter uses early stage university spin-offs as a sampling

frame and begins to examine opportunities that are created in a network as a result of using

the network for opportunity recognition. This paper suggests that there is a direct

relationship between entrepreneurial orientation (EO) (i.e., risk taking, innovativeness and

proactive assertiveness) and network capability (NC) (i.e., coordination, relational skills,

market knowledge and internal communication) on firm performance. While they find that

EO by itself does not influence performance significantly, the interaction between EO and

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NC has a positive effect on performance. These interesting results surface what may be an

important question for future research; namely, does firm performance in a network

influences the network itself? And, if so, what is the nature of that influence?

As a collection, these six papers are based in different disciplinary traditions, examine

central theoretical issues at different levels of analysis, and are concerned with distinct

alliance management challenges. This diversity captures the richness in both the

entrepreneurship and alliance literatures, but is only a first step. We hope that the work

included in this special issue will stimulate further cross-fertilization of the entrepreneur-

ship and alliance literatures. We believe that the authors of the works included in this

special issue are presenting us with an interesting and important set of potential research

questions that, when answered, have the potential to make important contributions to our

understanding of entrepreneurial alliances. We invite you to consider the authors’

contributions as potential sources of future research questions that you may seek to answer.

References

Alvarez, S.A., Barney, J.B., 2001. How can entrepreneurial firms really benefit from alliances with

large firms? Academy of Management Executive 15 (1), 139.

Alvarez, S.A., Barney, J.B., 2005. How entrepreneurs organize firms under conditions of uncertainty.

Journal of Management 31 (5).

Ireland, R.D., Covin, J.G., Kuratko, D.F., 2005. A model of corporate entrepreneurship strategy.

Working Paper, Texas A&M University.

Ireland, R.D., Hitt, M.A., Webb, J.W., 2006. Entrepreneurial alliances and networks. In:

Shenkar, O., Reuer, J.J. (Eds.), Handbook of Strategic Alliances. Sage Publishers, Thousand

Oaks, pp. 333–352.

Leiblein, M.J., Reuer, J.J., 2004. Building a foreign sales base: the roles of capabilities and alliances

for entrepreneurial firms. Journal of Business Venturing 19, 285–307.

Reuer, J.J., 2004. Strategic Alliances: Theory and Evidence. Oxford University Press, Oxford, UK.

Smith, K., Carroll, S., Ashford, S., 1995. Intra- and inter-organizational cooperation: toward a

research agenda. Academy of Management Journal 38, 7–23.

Sharon A. Alvarez

Fisher College of Business, Ohio State University, 2100 Neil Avenue,

Columbus, OH 43210-1144, United States

E-mail address: alvarez_42@cob.edu.

Tel.: +1 614 688 8289.

Corresponding author.

R. Duane Ireland

Mays Business School, Texas A and M University, College Station,

TX 77843-4221, United States

Jeffrey J. Reuer

Kenan-Flagler Business School, University of North Carolina, Chapel Hill,

NC 27599-3490, United States